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by 11/10/2000 2:58 PM
Stocks quoted in this article:
One stock that is performing exceptionally well today despite the general weakness in the broader markets is Paychex (PAYX – 57-1/16). PAYX is the second-largest payroll accounting firm in the U.S. In late-afternoon trading, the equity is up over three percent and has moved within striking distance of its October 30 all-time closing high. Aiding in PAYX's advance today was news that a major brokerage firm began coverage on the stock with a "buy" rating.<
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by 11/10/2000 12:19 PM
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Pep Boys – Manny, Moe, & Jack (PBY – 4-3/16) operates around 620 stores that feature automotive parts for the do-it-yourselfer, as well as on-site mechanic service. PBY shares have been slumping for practically half a decade, relinquishing nearly 90 percent of their value since their October-1996 peak. This decline has been exacerbated by resistance at PBY's intermediate- and long-term moving averages. Already today, the stock has seen twice its average daily volume cross the tape. The equity has also dropped nearly six percent to record a new annual low of 4.

Thursday evening, the company reported a third-quarter loss of $1.24 per share. This pales in comparison to the same time period in 1999, when PBY announced a 20-cent-per-share gain. Moreover, the firm eked out a one-percent gain in same-store sales. Last week, PBY officials announced the impending closure of 38 unprofitable stores.
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by 11/10/2000 9:51 AM
Stocks quoted in this article:
Paradyne Networks (PDYN – 4-9/64) manufactures broadband and narrowband network access products. The company sells its products to businesses including Lucent Technologies (27 percent of PDYN's sales), AT&T, and Citigroup. On September 28, the shares gapped over 40 percent lower after announcing that third-quarter earnings would fall significantly below analysts' expectations. The stock has since been unable to recover from this drubbing. For the past month, the equity has been wedged in a trading range between the 3-1/2 and 4-1/2 levels.

Yesterday, something strange was afoot on the PDYN December 5 call. Previously home to only 40 contracts, this back-month position saw 10,080 contracts trade yesterday, all of which translated into new open interest. Shortly before 10:15 a.m. yesterday, two large blocks consisting of 800 and 9,280 contracts crossed the tape. The smaller block traded between the bid and the ask prices, while the large block went off at the bid price of 5/16 per contract. The number of open calls at this strike is now nearly equal to open interest at the November 5 call, which weighs in at 10,200 contracts. By alarming contrast, the site of heaviest put open interest is the April 10 put, where a mere 264 contracts reside.
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by 11/9/2000 6:39 PM
Stocks quoted in this article:
Power-One (PWER - 60-5/8) makes power conversion products for communications applications such as AC/DC converters and voltage power switchers. Their largest customer, Cisco Systems (CSCO - 53-1/4), accounts for 16 percent of their sales. When Cisco announced, along with their earnings, that they will be needing less inventory, PWER got hit hard. What's more, PWER had recently announced the sale of another four million shares of stock. The stock reacted violently to this double whammy, dropping 22 percent in the last two days.

PWER sales and earnings have more than doubled in the last year. But the stock price has more than doubled in the last six months, hitting a new high of 89-13/16 in October. The company has now offered guidance that they will be selling even more to CSCO in the near future, including a 30-percent increase this quarter and continuing through 2001. Today, traders viewed the previous two days' action as an overreaction and bid up the shares on brisk volume. In the short term, the stock may find reistance near the 75 strike, where there is peak open interest of 1,493 November calls. The fundamentals warrant consideration for a longer-term position. <
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by 11/9/2000 9:11 AM
Stocks quoted in this article:
This morning, electronics retailer Best Buy (BBY - 52-3/8) offered a downward revision for its earnings projections for the second half of the year. According to BBY, increased promotional activity due to a softer economy was the major reason for the decline in expected earnings.

In addition, BBY stated that due to increased competition, gross margins are lower. In regards to earnings, the firm now expects to report 27 cents per share for the third quarter and roughly 90 cents per share in the fourth quarter. Analysts' estimates called for earnings-per-share of 44 cents in the third quarter and $1.01 in the fourth quarter. <
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